Osmond plans Six Continents bid

LEISURE giant Six Continents today pledged to press ahead with plans to demerge its hotels and pubs divisions despite the prospect of a £5.3bn takeover offer from entrepreneur Hugh Osmond. Famed for floating Pizza Express, Osmond is teaming up with long-time business partner Alan McIntosh to 'consider' a move for the pubs and hotels chain through cash shell Capital Management and Investment.

CMI spent £14 million on 2.6m shares in Six Continents on Monday, fuelling fevered speculation that Osmond may bid for the group, currently in the process of splitting in two.

In a short statement, CMI said it was 'considering making a takeover offer'. It added that, while no assurance could be made that a bid would be forthcoming, 'a further announcement will be made in the near future'.

Six Continents said it would press on with its previous plans until it had received an offer. Shares in Six Continents surged 35 1/2p to 590p as investors licked their lips at the prospect of a Safeway-style takeover battle for the group, whose operations include InterContinental hotels and pubs chain All Bar One.

Osmond and McIntosh worked with Six Continents to outbid Whitbread for the Allied Domecq pubs business in 1999 and analysts believe their main target now is the group's pub interests.

Nigel Parsons, leisure analyst at Williams de Broë said: 'He is trying to put together a concert party to buy the business and split the hotels up among other interested parties or he is after an early look at the books in the pubs business which is the bit he is probably interested in. The share price reaction today indicates he is a credible player.'

But Osmond is likely to face fierce competition from rival hotel chains Marriott, Hilton and Starwood, which are all believed to be circling along with a host of private equity groups including Wall Street buyout giant Kohlberg Kravis Roberts.

KKR, one of six buyers lining up a bid for Safeway, is believed to have run the rule over the Six Continents' hotels business and may bid for that division, possibly in conjunction with a rival hotelier.

Earlier this week, Six Continents confirmed plans to demerge its pubs interests into a separate business - Mitchells & Butlers - and return £700m in cash to shareholders.

Osmond was today appointed executive chairman at CMI, with McIntosh becoming finance director.